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volume 138, issue 3, august 2023
1. title: ai-tocracy
authors: martin beraja and others
abstract: recent scholarship has suggested that artificial intelligence (ai) technology and autocratic regimes may be mutually reinforcing. we test for a mutually reinforcing relationship in the context of facial-recognition ai in china. to do so, we gather comprehensive data on ai firms and government procurement contracts, as well as on social unrest across china since the early 2010s. we first show that autocrats benefit from ai: local unrest leads to greater government procurement of facial-recognition ai as a new technology of political control, and increased ai procurement indeed suppresses subsequent unrest. we show that ai innovation benefits from autocrats� suppression of unrest: the contracted ai firms innovate more both for the government and commercial markets and are more likely to export their products; noncontracted ai firms do not experience detectable negative spillovers. taken together, these results suggest the possibility of sustained ai innovation under the chinese regime: ai innovation entrenches the regime, and the regime�s investment in ai for political control stimulates further frontier innovation.
2. title: justifying dissent
authors: leonardo bursztyn and others
abstract: dissent plays an important role in any society, but dissenters are often silenced through social sanctions. beyond their persuasive effects, rationales providing arguments supporting dissenters� causes can increase the public expression of dissent by providing a �social cover� for voicing otherwise stigmatized positions. motivated by a simple theoretical framework, we experimentally show that liberals are more willing to post a tweet opposing the movement to defund the police, are seen as less prejudiced, and face lower social sanctions when their tweet implies they had first read credible scientific evidence supporting their position. analogous experiments with conservatives demonstrate that the same mechanisms facilitate anti-immigrant expression. our findings highlight both the power of rationales and their limitations in enabling dissent and shed light on phenomena such as social movements, political correctness, propaganda, and antiminority behavior.
3. title: misdemeanor prosecution
authors: amanda agan and others
abstract: communities across the united states are reconsidering the public safety benefits of prosecuting nonviolent misdemeanor offenses, yet there is little empirical evidence to inform policy in this area. we report the first estimates of the causal effects of misdemeanor prosecution on defendants� subsequent criminal justice involvement. we leverage the as-if random assignment of nonviolent misdemeanor cases to assistant district attorneys (adas) who decide whether a case should be prosecuted in the suffolk county district attorney�s office in massachusetts. these adas vary in the average leniency of their prosecution decisions. we find that for the marginal defendant, nonprosecution of a nonviolent misdemeanor offense leads to a 53% reduction in the likelihood of a new criminal complaint and a 60% reduction in the number of new criminal complaints over the next two years. these local average treatment effects are largest for defendants without prior criminal records, suggesting that averting criminal record acquisition is an important mechanism driving our findings. we also present evidence that a recent policy change in suffolk county imposing a presumption of nonprosecution for nonviolent misdemeanor offenses had similar beneficial effects, decreasing the likelihood of subsequent criminal justice involvement.
4. title: the geography of unemployment
authors: adrien bilal
abstract: unemployment rates differ widely across local labor markets. i offer new empirical evidence that high local unemployment emerges because of elevated local job-losing rates. local employers, rather than local workers or location-specific factors, account for most of the spatial gaps in job stability. i propose a theory in which spatial differences in job loss emerge in equilibrium because of systematic differences between employers across local labor markets. the spatial sorting decisions of employers in turn shape heterogeneity across locations. labor market frictions induce productive employers to overvalue locating close to each other. the optimal policy incentivizes them to relocate toward areas with high job-losing rates, providing a rationale for commonly used place-based policies. i estimate the model using french administrative data. the estimated model accounts for over three-quarters of the cross-sectional dispersion in unemployment rates and for the respective contributions of job-losing and job-finding rates. inefficient location choices by employers amplify spatial unemployment differentials fivefold. both real-world and optimal place-based policies can yield sizable local and aggregate welfare gains.
5. title: the other great migration: southern whites and the new right
authors: samuel bazzi and others
abstract: this article shows how the migration of millions of southern whites in the twentieth century shaped the cultural and political landscape across the united states. racially and religiously conservative, southern white migrants created new electoral possibilities for a broad-based coalition with economic conservatives. with their considerable geographic scope, these migrants hastened partisan realignment and helped catalyze and bolster a new right movement with national influence over the long run. more than just augmenting the conservative voter base outside the south, they influenced non-southerners by building evangelical churches, diffusing right-wing media, and mixing through intermarriage and residential integration. tracking non-southern households, we show that exposure to southern white neighbors increased adoption of conservative religious norms. overall, our findings suggest that this mass migration blurred the north�south cultural divide and reshaped the geography of conservatism in the united states.
6. title: market power and spatial competition in rural india
authors: shoumitro chatterjee
abstract: market power of intermediaries contributes to the low incomes of farmers in india. i study the role of spatial competition between intermediaries in determining the prices that farmers receive in india by focusing on a law that restricts farmers to selling their goods to intermediaries in their own state. i show that the discontinuities in market power generated by the law translate into discontinuities in prices. increasing spatial competition by one standard deviation causes prices received by farmers to increase by 6.4%. i propose and estimate a quantitative spatial model of bargaining and trade to shed light on spatial and aggregate implications. estimates from the structural model suggest that removing the interstate trade restriction in india would increase competition between intermediaries. thereby average farmer prices and their output would increase by at least 11% and 7%, respectively. the value of the national crop output would increase by at least 18%. however, there are distributional consequences as well, as some farmers stand to lose due to increased local production.
7. title: overreaction in expectations: evidence and theory
authors: hassan afrouzi and others
abstract: we investigate biases in expectations across different settings through a large-scale randomized experiment where participants forecast stable stochastic processes. the experiment allows us to control forecasters� information sets as well as the data-generating process, so we can cleanly measure biases in beliefs. we report three facts. first, forecasts display significant overreaction to the most recent observation. second, overreaction is stronger for less persistent processes. third, overreaction is also stronger for longer forecast horizons. we develop a tractable model of expectations formation with costly processing of past information, which closely fits the empirical facts. we also perform additional experiments to test the mechanism of the model.
8. title: imperfect risk sharing and the business cycle
authors: david berger and others
abstract: this article studies the macroeconomic implications of imperfect risk sharing implied by a class of new keynesian models with heterogeneous agents. the models in this class can be equivalently represented as a representative-agent economy with wedges. these wedges are functions of households� consumption shares and relative wages, and they identify the key cross-sectional moments that govern the impact of households� heterogeneity on aggregate variables. we measure the wedges using u.s. household-level data and combine them with a representative-agent economy to perform counterfactuals. we find that deviations from perfect risk sharing implied by this class of models account for only 7% of output volatility on average but can have sizable output effects when nominal interest rates reach their lower bound.
9. title: cultural distance and conflict-related sexual violence
authors: eleonora guarnieri and ana tur-prats
abstract: this article examines the relationship between ethnic-based gender norms and conflict-related sexual violence. we generate a novel dyadic data set that contains information on the ethnic identity of all the actors involved in ethnic civil conflicts around the world between 1989 and 2019 and their use of sexual violence. we exploit ethnographic information to construct a new male dominance index at the ethnicity level that captures deep-rooted gender norms. first, we find that male-dominant armed actors are more likely to be perpetrators of sexual violence. second, we consider the cultural distance in gender norms between the combatants and show that sexual violence is driven by a specific clash of conceptions on the appropriate role of men and women in society: sexual violence increases when the perpetrator is more male dominant than the victim. additional analyses suggest that gender norms influence both the strategic use of sexual violence for military purposes and the expressive use of sexual violence for private motivations. these patterns are specific to sexual violence and do not explain general violence in a conflict. differences in other cultural dimensions unrelated to gender are not associated with conflict-related sexual violence.
10. title: the political economics of green transitions
authors: timothy besley and torsten persson
abstract: reducing the emissions of greenhouse gases may be almost impossible without a green transition�a substantial transformation of consumption and production patterns. to study such transitions, we propose a dynamic model, which differs from the common approach in economics in two ways. first, consumption patterns reflect not just changing prices and taxes, but changing values. transitions of values and technologies create a dynamic complementarity that can help or hinder a green transition. second, and unlike fictitious social planners, policy makers in democratic societies cannot commit to future policy paths, as they are subject to regular elections. we show that market failures and government failures can interact to prevent a welfare-increasing green transition from materializing or make an ongoing green transition too slow.
11. title: regulating untaxable externalities: are vehicle air pollution standards effective and efficient?
authors: mark r jacobsen and others
abstract: the world has 1.4 billion passenger vehicles. how should governments regulate their air pollution emissions? a pigouvian tax is technologically infeasible. most countries instead rely on exhaust standards that limit air pollution emissions per mile for new vehicles. we assess the effectiveness and efficiency of these standards, which are the centerpiece of u.s. clean air act regulation of transportation, and counterfactual policies. we show that the air pollution emissions per mile of new u.s. vehicles has fallen spectacularly, by over 99%, since standards began in 1967. several research designs with a half century of data suggest that exhaust standards have caused most of this decline. yet exhaust standards are not cost-effective in part because they fail to encourage scrap of older vehicles, which account for the majority of emissions. to study counterfactual policies, we develop an analytical and a quantitative model of the vehicle fleet. analysis of these models suggests that tighter exhaust standards increase social welfare and increasing registration fees on dirty vehicles yields even larger gains by accelerating scrap, although both reforms have complex effects on inequality.
12. title: visual inference and graphical representation in regression discontinuity designs
authors: christina korting and others
abstract: despite the widespread use of graphs in empirical research, little is known about readers� ability to process the statistical information they are meant to convey (�visual inference�). we study visual inference in the context of regression discontinuity (rd) designs by measuring how accurately readers identify discontinuities in graphs produced from data-generating processes calibrated on 11 published papers from leading economics journals. first, we assess the effects of different graphical representation methods on visual inference using randomized experiments. we find that bin widths and fit lines have the largest effects on whether participants correctly perceive the presence or absence of a discontinuity. our experimental results allow us to make evidence-based recommendations to practitioners, and we suggest using small bins with no fit lines as a starting point to construct rd graphs. second, we compare visual inference on graphs constructed using our preferred method with widely used econometric inference procedures. we find that visual inference achieves similar or lower type i error (false positive) rates and complements econometric inference.
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